Practice Areas

Predominance of U.S. Parts, Complexity of U.S. Assembly Confer Origin, CBP Rules

Wednesday, May 02, 2018

Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of gyrocompasses that may be offered to the U.S. government under an undesignated government procurement contract. Any party-at-interest may seek judicial review of this determination by June 1. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.

The item at issue transmits data to onboard navigational and control systems to control a ship’s movement at sea. It is composed of (1) an inertial sensor assembly that measures raw accelerations and rotation rates (made in France from French, or possibly U.S., parts), (2) a digital signal processing board that computes position and sends that information to a memory unit (made in the U.S. from U.S. parts), (3) an interface board that allows the gyroscope to communicate with the ship’s other navigational equipment (made in the U.S. from U.S. parts, except some connectors made in Germany), (4) a processor board that serves as the intelligence of the item (made in the U.S. from U.S parts), and (5) a customized housing that encloses and protects the other components (machined in the U.S. from U.S. parts).

In ruling HQ H287851 CBP concludes that the country of origin of the gyrocompasses for purposes of U.S. government procurement is the U.S. CBP explains that virtually all the materials used are of U.S. origin and that these U.S.-origin parts are essential to the functionality of the finished product. In addition, the assembly processes that occur in the U.S. are complex and time-consuming. Finally, the French-origin parts undergo a change in name, character, and use when assembled into the finished product.